MODULE II: REAL WORLD CASE

UPS VERSUS FEDEX: COMPETING ON THE WORLD WIDE WEB

The World Wide Web is the latest battlefield for warring delivery companies FedEx and UPS, and their arsenal is a mix of intranet and electronic commerce applications. At stake: kingship of top-to-bottom package scheduling, shipping, and tracking via the Internet. The companies have vowed that everything a customer does today will soon be done on-lineand that their financial futures depend on it.

"We're fanatics about the Web. It's hyperimportant to us," said Robert Hamilton, manager of electronic commerce marketing at FedEx Corp. In Memphis, Tennessee. The $9.4 billion company has a long-range goal of generating 100 percent of its business on-line.

No less adamant is United Parcel Service, Inc. "Our energy is the Internet. We know that's where we need to be," said Tom Hoffman, manager of public network access development in the customer automation group at UPS in Mahwah, New Jersey.

Many of the on-line applications that the firms have in the works aren't simple Web programs for interacting with customers. Nor are they strict, behind-the-firewall intranet applications. They are complicated hybridspublic Internet/intranet systemsthat few users have tried. Let's look at some stats fro both UPS and FedEx Systems:

UPS Internet Website

Web server software: Netscape Commerce Server

Hardware: Sun SPARCservers

Key services: Package tracking, rate calculations, transit maps

Traffic volume: 200,000 to 300,000 hits per week

UPS Intranet

Web browser: Netscape Navigator

Web server software: Netscape Communications Server

Hardware: Sun SPARCserver 1000s

Kinds of applications:

FedEx Internet Website

Web server software: Netscape Commerce Server

Hardware: Sun SPARC 1000s

Key services: Package tracking, delivery options, software downloads

Traffic volume: 280,000 to 420,000 hits per day

FedEx Intranet

Web browser: Netscape Navigator

Web server software: Netscape Communications Server

Hardware: Sun SPARCservers and HP 9000s

Kinds of applications:

UPS beat FedEx to market with a Web site that can handle package scheduling and pickup from start to finish. That means anyone in a major metropolitan area who has a box to ship can surf to the UPS Web site, check delivery routes, calculate rates, and schedule a pickup. Payment is made off-line. Eventually, payment will be done on the Web by credit card or, fro large, regular customers, via a tab tracked with on-line purchase orders.

Such a system requires data collected at the external Web site to be shunted in-house, melded with UPS's IBM mainframe and AS/400 scheduling system, and spit out in a Web-readable form for the waiting customer. UPS's information systems group has built connectors to translate Hypertext Markup Language and other Web languages to formats that are compatible with IBM databases. The tough part, Hoffman said, is designing a system that flows smoothly between the public internet and the secured intranet realm.

Meanwhile, UPS and FedEx run neck-and-neck in Web-based package tracking functions that let users type in a package number and find out where it is. FedEx users track 13,000 packages daily that way. UPS customers track 10,000 packages per day.

Source: Adapted from Kim Nash, "Overnight Services Duke It Out On-Line," Computerworld, April 22, 1996, pp. 1, 64. Copyright 1996 by Computerworld Inc., Framingham, MA 01701Reprinted from Computerworld.

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